Golden Bridge v. Apple: No Third Bite at the Apple as Damage Expert Excluded After Two Failed Reports and Where Trial Was Already Underway

Two weeks earlier, the court excluded the expert opinion and testimony of Plaintiff Golden Bridge Technology’s (“GBT”) damages expert. Nonetheless, the court gave GBT one week to submit a new report based on a new theory. After GBT met its deadline, Apple moved to exclude the second report as well.

As explained by the court, “Apple’s motion points out several of the significant flaws in Schulze’s current report: (1) Schulze improperly and sub silencio allocated the entire value of Apple’s portfolio licenses with Ericsson and Nokia to a tiny subset of a subset of a subset of a subset of the patents and standards in those portfolios; (2) Schulze improperly tripled the per-unit rate that Apple would have paid to GBT based on purely academic articles; (3) Schulze improperly failed to compare the patent-in-suit’s technical merits to those of other standards essential patents and (4) Schulze improperly failed to allocate any value to the non-license terms of the Ericsson and Nokia agreements.”
The court then focused on the first of the these arguments and found that the error in analyzing the licenses was failed to the expert report. “The portfolio license agreements that undergird Schulze’s calculations covered “all standards essential patents” owned by those companies. These patents cover a wide array of technologies beyond the WCDMA standard, including but not limited to Wi-Fi, GSM, and LTE. Yet in calculating a reasonable royalty, Schulze begins with the premise that the under both agreements, “Apple was granted a license to all Nokia[/Ericsson] patents that are essential to the WCDMA standards.” This statement, while true, does not account in any way at all for the many other SEPs to which Apple was also granted a license. When pressed in deposition, Schulze admitted that he focused on the ‘793 patent and attributed no value whatsoever to patents essential to other standards because in his estimation, their value would be “marginal,” though his report does not acknowledge this omission, let alone attempt to explain it. At the hearing on this motion, counsel for GBT attempted to explain this omission by explaining that, at the time of the agreements “the [W]CDMA standard is what was being used in connection with the iPhone and iPad units accused here.” This explanation might have been sufficient if Schulze had cited any evidence supporting it in his report, but he did not.”

The court went on to explain that “[u]nder established Federal Circuit law, an expert may not rely on broad licenses that cover technologies far beyond the patents-in-suit without accounting for the differences in his calculations.7 That is precisely what Schulze did not do here, resulting in a fundamentally unsound calculation. That the entire dollar value of the Apple-Ericsson and Apple-Nokia agreements stemmed entirely from the actually-essential (not just declared essential) WCMDA patents (not those related to other active standards) relating to terminal devices is an implausible assumption to begin with, and Schulze does not even attempt to justify this assumption. Each of the other errors identified by Apple then compounded this basic error, with the end result that ‘there is simply too great an analytical gap between the data and the opinion proffered’ to allow its admission.”

The court then ordered that GBT’s damage expert would not be permitted to testify at the upcoming trial. “Schulze will not be permitted to testify in the upcoming trial. With the jury already picked and trial underway, Apple would suffer undue prejudice if GBT were to offer a new damages expert with yet a third theory, to which it would have had no meaningful time to respond. However, GBT is free to offer evidence of its damages from other, fact witnesses.”

Stan Gibson, an experienced technology and IP trial lawyer, represents inventors, manufacturers, owners and others in litigation centering on complicated technology. Stan's practice is national in scope and he represents both plaintiffs and defendants and has litigated dozens of cases on behalf of his clients, taking many of them to trial. Although most cases settle, Stan's ability to take cases to trial enhances their value and drives favorable verdicts and settlements. Contact him at 310.201.3548 or SGibson@jmbm.com.

Greg Cordrey, an experienced patent litigator and former flight test engineer, represents a wide range of industries including medical device, computer, e-commerce, semiconductor, automotive, aircraft, and consumer products. He has litigated patent cases nationwide and has practiced before the Federal Circuit and the U.S. Patent and Trademark office as a registered patent attorney with experience in concurrent litigation and patent reexamination proceedings. Greg is recognized as one of the "Best Lawyers in America" in IP Law, as well as a "Super Lawyer" and "Rising Star." Contact him at 949.623.7236 or GCordrey@jmbm.com.

Rod Berman is recognized by the Daily Journal as one of the top 30 intellectual property attorneys in the State of California, and by the Los Angeles Business Journal as one of the top 100 attorneys in Los Angeles. Rod's practice focuses on patent, trademark, copyright, unfair competition and internet responsibilities and includes counseling, litigation, opinions, licensing and prosecution. In addition to being a registered patent attorney, Rod is a court-recognized expert in patent and trademark law, and has successfully argued before the Federal Circuit. Contact Rod at 310.201.3517 or RBerman@jmbm.com.

Andrew Shadoff, is a litigation associate who has assisted in prosecuting and defending patent infringement lawsuits involving mechanical devices. He has drafted successful summary judgment motions and pretrial motions in limine, and has assisted with trial and witness preparation. Contact him at 310.712.6856 or AShadoff@jmbm.com.

Joe Mellema's practice focuses on litigation in federal and state courts, including the protection and enforcement of intellectual property rights, and business and commercial disputes. He has handled patent, trademark, copyright, trade secret, unfair business practices, antitrust, and business and commercial lawsuits in all phases of litigation and arbitration. In addition to a law degree, he has dual degrees in electrical engineering and physical sciences, and was formerly a systems engineer at Raytheon Company. Contact him at 949.623.7232 or at JMellema@jmbm.com.

Rachel Capoccia

Rachel Capoccia focuses on technology-based litigation and counseling, with an emphasis on patent litigation, copyright litigation and other technology-related matters. Her legal experience is complemented by 10 years working at IBM as a software engineer before law school, during which she led a team of engineers who developed computer graphics software and computer aided design systems. She represents clients in all phases of patent infringement matters involving diverse areas of technology. Contact Rachel at 310.201.3521 or RCapoccia@jmbm.com.

Jessica Newman is a litigation associate, and a member of JMBM's Patent Litigation Group. She is involved in all aspects of litigation and has assisted in representing clients in a variety of industries with regards to patent infringement and copyright infringement issues. Contact her at 310.785.5372 or JNewman@jmbm.com.